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Required: Prepare the necessary journal entries to record the following transactions relating to the long-term issuance of bonds of Pynchon Apparel. If necessary, round all amounts to the nearest whole dollar. Omit journal entry explanations. March 1, 2012 ? Pynchon issued $400,000 face value, 8% bonds, for $437,000, including accrued interest. In addition, bond issue costs amounted to $2,900, which are not included in the $437,000. Interest is payable semiannually on December 1 and June 1 with the bonds maturing 10 years from this past December 1, 2011, which is the initial date of the bonds. Straight-line amortization is used for any bond premium or bond discount, and amortizing bond issue costs. The bonds are callable at 102. June 1, 2012 ? Paid the semiannual interest (do not amortize bond issue costs) December 1, 2012 Paid the semiannual interest on Pynchon Apparel bonds amortized the bond issue costs. Pynchon subsequently purchased $200,000 face value bonds at the call price. Record the interest payment and bond issue cost amortization for all of the bonds, and then record the repurchase of the $200,000 of bonds. Interest Payment Amortization of Bond Issue Costs Purchase of Callable Bonds

Paper#7544 | Written in 18-Jul-2015

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